Dividends, stock splits, and stockholdersâ?? equityP6.The stockholdersâ?? equity section of Minh, In

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Dividends, stock splits, and stockholders’ equityP6.The stockholders’ equity section of Minh, Inc.’s balance sheet as of December 31, 2013, follows.Contributed capital:Common stock, $3 par value, 1,000,000 shares authorized, 80,000 shares issued and outstanding$240,000Additional paid-in capital75,000Total contributed capital$315,000Retained earnings 240,000Total stockholders’ equity$555,000A review of Minh’s stockholders’ equity records disclosed the following transactions during 2014:Mar. 25 The board of directors declared a 5 percent stock dividend to stockholders of record on April 20 to be distributed on May 1. The market value of the common stock was $21 per share.Apr. 20 Date of record for stock dividend. May 1 Issued stock dividend.Sept. 10 Declared a 3-for-1 stock split.Dec. 15 Declared a 10 percent stock dividend to stockholders of record on January 15 to be distributed on February 15. The market price on this date is $9 per share.reQUIreD1. Record the stockholders’ equity components of these transactions using T accounts.2. Prepare the stockholders’ equity section of Minh’s balance sheet as of December 31, 2014. Assume net income for 2014 is $494,000.3. aCCountingConneCtion▶ If you owned 2,000 shares of Minh stock on March 1, 2014, how many shares would you own on February 15, 2015? Would your pro- portionate share of the ownership of the company be different on the latter date from what it was on the former date? Explain your answer.


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